"Dear All We are group company and have around 7 companies under this. One company is a trading company in metal recycling and have branches all over in one country. Each of these branches have to have balance sheet, P&L and consolidate at the trading company. The structure of the org is like this Group company Company 1 Branch 1 to 10 Company 2 Company 3 Company 4 Company 5 Company 6 Company 7 How to set up the enterprise structure for company 1 Will each brnch be a company code as legal entity is only one. Please advise. Thanks and Regards, Arun Kumar Menon"

One option is to set up each branch as a company codes, yes. But I think you should also look into the possibilities of Business Areas or Profit Centers instead.

Are you using New GL? That will help direct your solution. New GL would permit the use of Segments, where each of your Branches is represented by a Segment. Document Splitting would then permit Balance Sheets and Income Statements to be generated by Segment (Branch).

If you are using a new GL, the *segment unit* will help to create Balance
sheet and P&L account within the company code level for varied branches.
All these 10 segments will consolidate at company code level.
I hope it helps.

A lot will depend on the legal requirements here. If the various branches are simply sending goods and services to each other, you could have them set up as Plants and just do an STO to move the goods. In this case, each branch plant is set up also as a Plant Customer and Plant Vendor, and you can use pricing conditions on the STO to handle any price / cost markups or markdowns, if needed.

However, if they are required to eliminate any intercompany profits made between the branches (within one company code) then you will need to set them up as individual company codes.

Enterprise structure is like One at top level i.e. ""COMPANY"" and rest are
next to company
i.e. ""COMPANY CODE"" which will works as a separate legal entity and
statements
like Bal. Sheet and P&L a/c will remain separate.

Basic question. Are you using SD/MM?
If you are using SD, are you using CO-PA (<= operating concern)?
If yes, I think you can get P&L information (inter-branch trade) by using Sales Office by using CO-PA. Inter branch sales and purchase be recorded using customer master where customer group is available.
You will eventually separate plants in that case, same way reported in CO-PA.

If you are not using SD/MM, then I think you need to define profit centers for each company code, each branch, based on the assumption you do the document split by profit center level (or.. segment).
Also, there is a feature called Business Place. I haven't used this before, but this might help for your situation.

So my assumption so far is, one company code for one legal entity.
If you assign company code for each branch, I hear of one case where they needed batch input development for asset movement between branches.
Personally I simply don't like the idea.